why everything costs money​​​CAPITAL VOLUME 1​Part Five

PART 5

An ongoing series going through Marx, Capital Volume 1. Access free electronic copies of Volume 1 here or here. [Capital Volume I, Chapter 7, pgs. 283-306 of Penguin Press] This chapter is the beginning of Part Three: The Production of Absolute Surplus-Value. ​Chapter 7: The Labour Process and the Valorization Process

It’s easy to see how production processes produce use-values (commodities, under capitalism) - that’s the point of them. But how do they produce value itself? This is the question this chapter aims to answer.

“The use of labour-power is labour itself.” Labor is a process by which people change the relationship between themselves and nature, adapting materials of nature to the worker’s human purposes. This process is made of 1) purposeful activity (the work itself) 2) the object on which that work is performed (materials) and 3) the instruments of that work. So if you were making a machete, the hammering of steel into machete-shape would be #1, the steel itself would be #2, and the furnace for heating the steel would be #3. If you were growing plantain, the planting and harvesting would be #1, the whole plant would be #2, and the earth you planted it in would be #3. That’s a good transition to this point: this all happens inside of nature, since humans are themselves natural and our powers (physical body, animal instincts) are natural. The earth is itself an instrument of labor, and provides stones and wood and bones and shells and all that good shit that we use to make tools to make even cooler stuff. (283-286)Labor produces things that are use-values, “natural material adapted to human needs by means of a change in its form”, like steel that gets molded into machete-shape so that humans can cut things. These things were planned in advance – it’s no accident that the machete has the physical characteristics that it has. The machete, as a use-value, “objectifies” the intentional labor that created it: it is the end result of the union of a thought like “it would be dope if I had something long and sharp to cut things with” with our #2 (in this case, the raw material of steel), #3 (tools like a furnace and hammer), and #1 (labor that applies the tools to the material). #2 and #3, materials and tools, are the things that the worker uses to make her labor productive, that is, they are the means by which her labor ends up making a product. So we can call these means of production (now you know what we need to seize!). (286-287)​Whether something is a tool or a raw material, or a product depends on what production process we’re talking about. Some use-values that we have to produce become material or tools for other production processes. Plantain could be either a product or a material. If we’re talking about growing and harvesting plantain, plantain is the product. If we’re talking about producing dodo (fried plantain dish), the production process for making meals is, of course, cooking. In that case, plantain is a raw material that needs to be combined with labor (cooking), tools (a pot), and other materials (oil). Similarly, a machete could be either a product or a tool. If you’re a smith making machetes, it’s a product. If the smith sells the machetes to a farmer making processed sugarcane, and she uses machetes to chop up the sugar cane, the very same machetes that were products for the smith are tools for her. Then, labor consumes products: it uses one set of products as means of production for another set. (287-290)

Best eaten with Nigerian jollof rice (your mileage with Ghanaian jollof may vary).Under capitalist legal and social systems, the worker only owns their labor power(#1). The capitalist owns the means of production (#2 and #3) and also what’s produced out of the interaction of 1-3. (292) But remember from part 4 that the capitalist’s goal is to move from M to M’, that is, to get more money than they started with. Money is based on exchange value. But so far we’ve only talked about how production creates (a) use-value. So we need to also say how production creates value in some other sense, the kind that could explain the surplus-value that is the difference between M and M’.* (special edition on the way discussing what the hell “value” means, go with it for now).

From part 1, we know that the value of a commodity is determined by the quantity of labor materialized in its use-value, that is the labor-time socially necessary to make that kind of commodity. We can say now a bit more precisely exactly how labor-time is “materialized” or “objectified” in its product.Again, I’ll defer to Marx’s example because of its historical significance: take the production of yarn for a capitalist, call them Mr. Rhodes. Rhodes needs cotton as raw material, a spindle as a tool, and someone to spin the cotton on the spindle until it becomes yarn. Say for simplicity’s sake that Rhodes buys 10 pounds of cotton for 10 bucks, and that this price represents the actual value of the cotton, measured in labor-time. Price wear and tear on the spindle and other tools at 2 bucks. That puts the value contributed to the finished cotton by the means of production at 12 bucks. Let’s also say that 12 bucks represents the value of two days of abstract labor time, measured in 12 hour shifts (that puts a full 12-hour day of work at $6 – these are toy numbers from an economic example from the mid-19th century, so don’t be alarmed that this doesn’t represent a living wage!). The value of the yarn that is produced will represent the labor time needed to make the cotton and the spindle (and whatever other tools are used), the labor time lost in wear and tear on the tools, and the labor time put into using the materials and tools to make yarn. The price of the cotton already represented the first source of value, we arbitrarily priced the second at 2 bucks, and the third is the value that remains to be added by the labor that converts cotton and spindles into yarn.

Say that, on average, 1 and 2/3 lb of cotton can be spun into 1 and 2/3 of yarn in an hour. Then, we want to know how valuable that is, and we measure value in labor time. To put that question in math:10 pounds of yarn = ? hours of labor-time We can answer this using our toy numbers: our spinner generates 5/3 lbs per hour. To find out how many hours it would take to produce all 10 pounds, we can do a wee bit of algebra:

5/3 lbs yarn / 1 hour = 10 lbs / x hours 5/3x = 10 x = 10 * 3/5 = 30/5 = 6 hours​if you’re confused about why we can treat the numbers this way given that the numbers are about different things (pounds, dollars, dollars/hour) check out this explanation of doing math with different unitsSo now we know, in abstract labor time, what 10 lbs of cotton is worth: the 2 days of labor time contributed by the means of production (the cotton and the wear and tear on the spindle) plus the labor time contributed by the spinner to turn the means of production into yarn. We solved for the spinner’s labor time: 6 hours, or half of a “day” if working days are 12 hour shifts. We can put a number on that: $3 bucks, which is half of the $6/day figure we solved for earlier. Then, the value of 10 lbs of cotton should be $15. If the wage paid to the spinner is set at $3, we don’t have a problem: the costs of all the inputs (from the means of production and the labor) all add up to the price of the product, and there is no surplus value. How the hell do we get from this to surplus value?! Where it it?! (295-300)

Here’s the trick: this is where shit (specifically, surplus value) literally gets real, so check this out very carefully.The spindle isn’t going anywhere: the means of production in the cotton factory could sustain not just a half a day of work but a full day. If 10 lbs of cotton could absorb 6 hours of work to become 10 pounds of yarn, then 20 pounds of cotton could absorb a full 12 hour day of work and become 2 pounds of yarn. Let’s assume Mr. Rhodes gets the spinner to spin for a full day, not a half day, at the same. The value of the 20 lbs of yarn produced will be $30, and we can assume that Mr. Rhodes sells it at this price. $24 of that represents the contribution of the means of production, and $3 the wage paid to the spinner. Now we’ve found surplus value: despite the fact that $6 is added to the cotton by the worker, the worker leaves with only $3 paid in a wage. That leaves $3 extra “produced” by this setup. There’s our surplus value.

The trick works because of the distinction between the exchange value and the use value of labor. Remember, the value of anything is the labor time required to produce it. That includes a person’s labor power – education and feeding and rest and training and “reproductive labor” are required to make someone sound enough in body and mind, and these are “materialized” in a person’s labor power in the way that the labor of metalsmithing is materialized in a machete. These things determine the exchange value of labor, which will set the price that the employer pays for it, since prices are set by exchange values under capitalism. But under capitalism, labor power is a commodity: the daily wage represents its sale to an employer for an agreed duration of time. And labor is the special kind of commodity (use-value) that, creates value by being “consumed” – that is, used. The same labor power that cost $3 to produce (worth a half-day in wages) may, when used in a production process, create value that exceeds this. That’s is the extra $3 in our example: the creation of value over and above the social cost of producing labor power itself is surplus value. (300-301)​This is how Mr. Rhodes “creates value”, this how the difference between M and M’ is generated: by incorporating living labor (a worker) with past labor in objective form (tools and raw materials that objectify that past labor that explain their current forms). This, the capitalist mode of production, is a mode of production where the same processes that create use-values also create objective social value (304).